Delphi plant attracts another offer

PERKINS TWP. Another potential buyer has submitted a $75 million bid to purchase the local Delp
Janet
May 24, 2010

 

PERKINS TWP.

Another potential buyer has submitted a $75 million bid to purchase the local Delphi plant.

If the sale is successful, the plant would be renamed Sandusky Wheel Bearing Inc., according to a news release sent by the bidder's representative, Baytree Investors.

The new bid includes keeping the plant's employees, who would receive 20 percent ownership in the business.

United Auto Workers Local 913 president Ralph Brumby was in Florida on Monday and declined to comment on the bid.

Delphi workers were unaware of the new bid and declined to comment.

The bid was submitted before the Monday deadline of a bid hearing, the release said.

The hearing allowed other businesses interested in acquiring the plant a chance to outbid Cleveland-based Resilience Capital Partners.

Resilience entered into a $44.2 million asset sale and purchase agreement last month with Delphi Corp. for the sale of its wheel bearings business.

The final sale of the business is contingent on the approval of the U.S. Bankruptcy Court and other closing conditions.

"This bid is, in our opinion, a vastly superior offer to that presently on the table for consideration, not only in yielding a higher price for the seller, but in also providing the ownership interest to the employees going forward," said Neil Z. Sussman, who is representing the bidder, in the release.

"We would also plan to have the entire management team in place going forward, as we have been very impressed with their ongoing business and future prospects for increasing the overall business of the plant," Sussman added.

Among the key stockholders in the new company would be Joseph B. Anderson Jr. and Mark Davison, former General Motors auto industry veterans and leaders of TAG Holdings.

TAG Holdings is the Troy, Mich., parent corporation for a diverse collection of manufacturing and service-based enterprises.

According to the bid, about 1,000 hourly and salaried plant employees would become stockholders in the company, and the board of directors would include representatives from management and hourly employees.

"Having employee-owners will, in our opinion, result in significantly better long-term employee morale and position the company better for added business," Sussman said.

The new bid does not require changes to the existing UAW contract.

"The bidder feels that in extending the significant ownership position to those employees in the future business, the membership may in the future be willing to agree to certain work rule and other changes that will benefit all parties," the bid states.

The bid also states the buyer will provide to GM an exclusive marketing plan that could help GM dealerships sell cars and improve output at the Perkins Avenue plant.

Delphi spokesman Brad Jackson declined to comment while the bidding process is ongoing.

Baytree Investors did not return calls seeking comment Monday.

In 2005, Delphi Corp. filed for Chapter 11 bankruptcy. In September several companies submitted bids to the U.S. Bankruptcy Court to buy the local wheel bearings plant.